Why Business Modelling is Your Start-up's Only Chance of Survival?

I don't know of a better definition of a start-up than how Steve Blank puts it - A start-up is a temporary organization in search of a profitable, repeatable, scalable business model.

Start-ups are temporary organizations because you are not going to be forever in the search mode. You have to keep pivoting to find your sweet spot fast enough before your cash, passion and energy runs out. When you iteratively find your profitable, repeatable, scalable business model through a series of experiments with each feeding the next; you transition out of being a start-up to a company which scales-up on known parameters as the equation for growth has been discovered. In the final stage; you become an enterprise, hopefully keeping the start-up consciousness still alive for continuous innovation to deliver greater and greater value to your target community and be the best in your industry.

The entire business modeling exercise during the search phase starts with answering three basic questions:
1. Who is your customer?
2. What problem is he facing?
3. Is the problem critical enough for him to solve such that he is willing to pay you more than your cost of acquiring the customer and delivering the promised goods / service to him?

You run experiments, collect metrics to validate assumptions and keep pivoting to reach your profitable, repeatable, scalable business model. Here are 8 ways in which you can pivot to iterate forward to build a business that makes a huge difference to its target community, which is the only way to laugh all the way to the bank:
1. Customer Problem
2. Market Segment
3. Technology
4. Product Feature
5. Revenue Model
6. Sales Channel
7. Product vs Services
8. Pivoting to differentiate from Competition

A word of caution of here - pivoting too fast or too slow - can both lead to painful death of the start-up. Ensure you are connected strongly with your customers, entrepreneur communities and mentors; so that you have them holding the mirror to you all the time for you to keep course-correcting at the right time, at the right pace.

Most small businesses spray and pray, blindfolded; hoping something that they do will give them the profitability that they are seeking. Time to take off the cover from your eyes, learn and implement the science of business-building that gives you deeply fulfilling super success.

Love,
Jyoti.

Further Reading: ​https://www.forbes.com/sites/martinzwilling/2012/01/21/a-smart-business-knows-8-ways-to-pivot-their-vision/#1563b2717f96